Rent Control Explained: Debunking Your Landlord’s Myths

Video produced and edited by Brooke Shuman and Anthony Mascorro

Rent across the country is reaching record highs. Tenant organizers in St. Paul, Minnesota think they have a solution. In November 2021, they passed a bill with a 3% cap on annual rent increases. The movement was led by renters like Cynthia Brown, a local resident who became homeless for two years after her husband passed away and she couldn’t afford her rent. We spoke to tenants in St. Paul Minnesota. Below is a full transcript of the video.

Cynthia Brown: I’ve been holding onto this all this time. Final notice: pay rent or vacate.

My husband was sick. We had seven wonderful years together, but he got cancer, and it spread from his back to his lung. And he passed away from fourth stage lung cancer. I lost my best friend.

When he passed away, all income ceased. The landlord came and told me, you know, with no sympathy, you got to get out. You know, if you can’t pay: you got to go. I put all my stuff in storage. I had no place to go. I actually asked strangers where I was working could I live with you guys? And I was homeless for two and a half years. I was homeless.

[Narrator]: Cynthia Brown is one of millions of renters in America who is just a few financial hardships away from being evicted. In the middle of the pandemic, rent across the country fell but now it’s back up, and in a lot of cities, it’s even higher than it was in 2019. 

[News clip]: Skyrocketing rents.

[News clip]: Rising at the fastest pace in decades.

[News clip]: How high can your rent go?

[Narrator]: But even before the pandemic, high rents were a problem almost everywhere.

Cynthia: Like a revolving door. ‘You don’t pay your rent? Get out. Because we sure got a whole lot of other people waiting.’ 

[Narrator]: Cynthia is a homeowner now, and she’s also an organizer. Last year, in St. Paul, Minnesota, tenants and activists passed a rent stabilization ordinance that caps the annual increase in rent at 3%. This is the kind of bill that landlords hate, and traditionally, economists have agreed.

[Clip of Milton Friedman]: You have rent control in New York City, which makes it uneconomical to maintain the houses and means that the only way you get any money out of them is by burning them down!

[News clip]: Rent controls will only make the problem worse.

[Narrator]: But is conventional wisdom correct? Or can rent stabilization actually help tenants the way it’s intended to do? 

This is the Class Room from More Perfect Union.

It’s practically a miracle that this bill passed at all. Nationwide, there isn’t a cap on how much a landlord can charge a renter. Many states actually have a ban on any kind of rent stabilization, and Minnesota is one of them. But St. Paul has a loophole–if residents can get enough signatures, a referendum can be put on the ballot. And the St. Paul residents that organizers spoke with wanted rent control.

Tram Hoang: Our campaign started because we heard from low-wealth BIPOC renters that they were experiencing rent hikes that were displacing them from their homes.

[Narrator]: This is Tram Hoang: the campaign manager for Keep St. Paul Home. 

Tram Hoang: And the question we would always get asked is, hey, is there any law that protects us from this? Right? We have a minimum wage that says, here’s the bare minimum for workers. But is there any policy that says this is the bare minimum for renters, and before May 1, 2022, there wasn’t.

[Narrator]: The bill faced fierce opposition.  A campaign called the Sensible Housing Ballot Committee raised $5 million from developers, over half of them from large, out-of-state corporate landlords. While the Keep St. Paul Home campaign raised a grand total of $380,000. The Think Twice St. Paul campaign, as it was called, created ads and literature that claimed that rent control would keep landlords from making improvements, leading to substandard housing. And that rent control can decrease housing stock—which is already very low in the Twin Cities. The Minnesota State Senate even went so far as to attempt to overturn the ordinance.

[News clip]: This bill being debated here at the capitol would not only overturn those votes but ban other cities from enacting rent control. 

Cynthia: It blew my mind, I’m like wait a minute can they do that?

[Narrator]: Tenants voiced their anger at the state attempting to cancel their vote.

[B Rosas at Minnesota State House]: A lot of St. Paul residents spent a large chunk of our time in the heat wave, in below zero weather talking to over 30,000 people. They wanted rent stabilization to pass in St. Paul. That is no mistake, that was not a coincidence, that was not an accident.

[Ann Schulman at Minnesota State House]: Step back from the brink and let the voters have a voice. We already voted.

[Narrator]: Ultimately the ordinance passed and went into effect May 1st. 

Tram: The thing with money coming in from outside is that that money doesn’t necessarily have the same impact as the trust and community that we had as a coalition. And it didn’t have the same effect as actual conversations with people. 

[Narrator]: Why has this issue turned out to be so important to voters in St. Paul? Largely because living in St. Paul, like many mid-sized cities in America, has gotten more expensive. After the 2008 foreclosure crisis, corporate and investor landlords bought single-family housing in Minneapolis in poorer neighborhoods and converted them to rentals. 

This was a trend that happened all over the country, particularly in mid-sized cities like Detroit, New Orleans, Denver, and Austin. During that time, the gap of home ownership widened between white and Black residents and the rents in low-income communities went up. So while it was being touted again and again as one of the nicest, more affordable places to live, it was increasingly less so for Black residents. 

You probably feel like you know this story already. It’s gentrification. Affordable housing becomes unaffordable, upscale food halls and themed bars arrive.

Danielle Swift: Some people think about gentrification as just investment, like, ‘well, gentrification is a good thing, because we need investment.’ But the real factor of what makes it gentrification is the element of displacement that comes along with the investment. That’s what makes it gentrification.

[Narrator]: Danielle Swift and Tia Williams work at the Frogtown Neighborhood Association. Tia grew up in Frogtown and the nearby neighborhood called Rondo in St. Paul. 

Tia Williams:  It’s kind of cliche to say it’s a melting pot, but it does seem kind of like that. I had a bike and I would go from my mom’s house to my dad’s house to my grandma’s house.

[Narrator]: For Tia, stories of displacement were part of her family history. In the early 20th century, when Tia’s grandmother was a child, Rondo was a thriving Black neighborhood. 

Tia: Of course, they called it a slum. But the resiliency of the Black neighborhood, creating something out of nothing has always been a story. And then it gets destroyed.

[Narrator]: In the late 1950s, the Rondo neighborhood was  razed using eminent domain to make way for Interstate 94. This was a pattern happening all over the country as the Federal Government made way for the Interstate System. In St. Paul, 600 Black families lost their homes. 

Tia: They took my grandmother’s house. Since then, there has not been another Black family that lived in that home. And she drives past it. She says ‘that’s where my bedroom window was.’ We used to have a festivity called Rondo Days, every summer. And one of the most joyous parts about this event to me was waking up at 9am, you could hear the drums from all over St. Paul. I took my daughters to Rondo days, my then four year old says, ‘are these all my cousins?’ And we just fell out laughing because all she seen was large groups of black people just greeting and loving and speaking.

[Narrator]: Tia and Danielle see the process of gentrification in Frogtown and Rondo as a reminder of what happened to Rondo decades ago. 

Tia: I don’t think it is as violent as it was. It’s very sneaky. It’s a slow burn. Now it gives this impression that there’s a choice that you can stay in your neighborhood or not.

[Narrator]: Rondo and Frogtown are now going through a new wave of displacement. This is the pattern with gentrification: a neighborhood like Rondo is first disinvested by the city. Money and people with money leave the neighborhoods for other places, often the suburbs. Less money goes to housing, to transit and to schools. Once the neighborhood is economically abandoned, the city then reinvests to make it more attractive for developers and higher-income residents. 

Can rent stabilization help with this? Rent stabilization can have lasting impact for tenants. A study on housing in rent stabilized apartments in San Francisco from the University of Southern California found that tenants “are 10 to 20 percent more likely to remain in their units and roughly 4 percent more likely to remain in San Francisco.” and that “rent regulations help to ensure community continuity, aging in place, and retention of a workforce in high-cost cities.”

Cynthia: I remember how I felt being turned down, feeling like, you know, I wasn’t worthy.

What was wrong with me? I don’t have three months rent. You know, you’re, you’re asking for like, 3500 $3,000. Who has that? Unless you get your taxes back.

[Narrator]: Let’s go back to the Think Twice St. Paul campaign. Are the fears of the developer industry and economists warranted? 

The St. Paul, Minnesota rent stabilization ordinance is unique in the United States—a 3% cap on rent raises on all housing—that even includes new construction. The ordinance is also universal, meaning it applies to all units and landlords won’t be incentivized to push out tenants so they can begin charging higher rents: a common problem in New York and San Francisco, where some units are stabilized and others are not. Because of the loosening of rent regulations since the 1990s in those cities, both San Francisco and New York saw increased eviction rates and decontrol of units. 

So what about the 3%? The St. Paul bill that passed was developed, in part, with the University of Minnesota’s Center for Urban and Regional Affairs, which found that even without rent stabilization in place, most rentals in the Twin Cities didn’t go up more than 3% a year. So the cap wouldn’t hurt most landlords and would cover operating costs, it just would prevent the most egregious hikes. 

Tram: That told us that even in the absence of a policy landlords were getting the returns they needed, and they didn’t have to increase rent more than 3%. But it also complemented what we were hearing on the ground from renters especially low income renters and bipoc, renters, renters whose first language wasn’t English renters, who were immigrants or refugees, that they were seeing rent increases of hundreds of dollars a month. That doesn’t happen to every renter. It’s definitely renters who are more vulnerable. 

[Narrator]: The common wisdom among economists, and repeated by Think Twice St. Paul, is that rent control slows new construction, which causes supply overall to shrink and prices to increase. The classic example of a price ceiling affecting demand. 

Tram: This fear that somehow rent stabilization will stop investment in new housing supply is really just a threat to disinvest in our communities, if we choose to take a strong enough stance against the egregious behaviors of corporate landlords and predatory landlords.

[Narrator]: The University of Minnesota’s report noted that rent stabilization has not historically impacted new construction but the study was based on cities that had a rent stabilization exemption for new construction. The fact is, the St. Paul ordinance is the first of its kind, and there’s not enough research to know what it will do to new developments. But Tram says that relying only on the market to create housing, most of it too expensive for St. Paul residents, is part of the problem.

Tram: And that’s something that people don’t think about. They don’t think about the power of the power of wealth in developers and landlords hands to say to essentially threaten us with disinvestment. We say, ‘what about new housing supply?’ But we don’t say, ‘what about the people who control whether or not new housing supply is, is a part of our future?’

[Narrator]: Rent control can’t fix the crisis of affordability by itself, but it can keep existing tenants from being displaced. Frogtown and Keep St. Paul Home instead advocate for something called Development Without Displacement” which would include building more affordable and public housing for low-income families. 

Tia: We just want to make sure that it is at the people who have been here, for many generations are able to stay here are able to afford to live here still. The housing developments are focused at what they call 60% ami or making $60,000 a year, then they’re missing a large amount of people who live in frog town, the average of $34,000 a year. 

Tram: Rent stabilization is one piece of the puzzle. I think we need more tenant protections. And we need to invest more in public housing. 

[Narrator]: We don’t know yet what the implementation of rent stabilization will be like in St. Paul but other cities can see what can be accomplished by a successful movement led by tenants. Tenants like Cynthia.

Cynthia: I look at the single mothers and how they’re struggling. If they don’t have no section eight, they’re paying this big ol’ rent that’s out there with late fees of $100. If more people came out and voted locally a whole lot of things would change. We need to get some people in there that’s for the people and not for the politicians and the big, big businesses for the people. That’s what the Constitution says. We the People. You, know? So let’s be about the people.

Videography by Nolan Morice